The New Jersey Economic Development Authority (NJEDA) today approved eight corporations to purchase $50 million in tax credits to fuel the New Jersey Innovation Evergreen Fund (NJIEF). The Authority also announced today that it is accepting applications from investment firms to be considered Qualified Venture Firms, meaning they would be certified for participation in the program. This will enable them to access both additional capital to invest in qualifying high-growth New Jersey businesses and additional strategic resources available in partnership with the NJIEF tax credit purchasers.
This marks a milestone in the creation of the NJIEF, a groundbreaking tool to increase access to strategic resources and venture capital in New Jersey. Under the NJIEF, the state will become an equity investor in startups deploying up to $600 million into companies alongside professional venture capital groups. The capital raised from the sale of these tax credits are expected to result in the funding of initial investments into six to ten high-growth businesses in New Jersey in 2023.
The following corporations, all with significant footprints in the Garden State, were approved to purchase tax credits through the NJIEF:
Today’s announcement follows the conclusion of the NJEDA’s inaugural New Jersey Corporate Business Tax Credit Auction to raise funds to support the NJIEF. The $50 million in tax credits sold at auction reflects higher demand that warranted an increase in the funds available from the pilot $30 million initially offered in August. In aggregate the auction provides the NJEDA with approximately $41 million of available capital for initial and follow-on investment. Earlier this year, the State budget approved seed funding of $5 million that will increase the available funding pool to $46 million, until the next auction.
“This strategic investment will not only support New Jersey’s entrepreneurs, but will also ensure that more companies start, grow, and stay in this great state,” Gov. Phil Murphy said. “Those highly successful companies that have built their reputations here now have an opportunity to support the next generation of great businesses that will carry New Jersey into the future. It also shows residents our commitment to making the state work for everyone with another innovative program aimed at expanding capital opportunities.”
“Investors and entrepreneurs alike have hailed the novel NJIEF as a powerful tool that will catalyze investment into New Jersey startups and now we know that the corporate sector sees the enormous value in the Fund as well,” NJEDA Chief Executive Officer Tim Sullivan said.
As part of the auction, each applicant submitted plans to support the state’s innovation economy along with their financial bids, including a commitment to serve on the NJIEF Advisory Board for one year. In total, the eight corporations approved today made strategic commitments totaling nearly $3.8 million to bolster the innovation community.
Examples of this strategic support included contributions to support external mentorship, programs; free shared workspace open to high-growth startups; long-term commitments of education and training to support the futures of Science, Technology, Engineering and Math (STEM) students from underserved school districts in the State; and forums that will bring world-class investors, enterprises, and early-stage startups together in New Jersey.
In accepting applications from professional, institutional venture capital investors, the NJEDA seeks private-sector partners to invest the NJIEF capital. These applications are reviewed and approved on a rolling basis. Those that meet the NJEDA’s criteria will be certified as Qualified Venture Firms under the Program and have access to up to $12.5 million per year to invest in Qualified New Jersey-based companies in innovative industries. The funded companies will also receive support from the corporations that purchased tax credits through the auctions. Additional information can be found at http://www.njeda.com/evergreen.
Full details on the NJIEF are available at https://www.njeda.com/evergreen.
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